LV bank settles federal complaint, class-action suit

Wednesday, Dec. 5, 2001 | 10:05 a.m.

A Las Vegas-based bank specializing in issuing secured credit cards to customers with low credit ratings has settled a class-action lawsuit as well as a complaint from the Office of the Comptroller of the Currency.

First National Bank of Marin issued a statement Tuesday that said under terms of the agreement it would reimburse customers who applied for the bank's credit card between July 27, 1996, and May 31, 2001, and who were charged enrollment fees and some finance charges.

A spokesman for the Office of the Comptroller said the bank was required to establish a $4 million account to handle restitution payments.

Spokesman Dean DeBuck said FNBM was accused of unfair and deceptive business practices under Federal Trade Commission regulations. Under the bank's program, the funds for a required savings deposit were charged against the customer's credit line, reducing the amount of available credit until the charge was paid off. As a result, most customers received a credit card with little or no available credit, he said.

In the bank's statement, the company did not admit to wrongdoing.

"This settlement enables First National to continue moving forward with providing quality credit products and services to our customers, which is our top priority," said FNBM Chief Executive Officer Robert DeJong.